When the time comes to purchase a property, most people think of the traditional ‘on the market’ purchase that is facilitated by an estate agency.
However, not all UK property purchases happen in this way – and another interesting way you can buy a house is by purchasing an off-plan property.
But what is an off-plan property? How do you buy one? – and what are the pros and cons of doing so?
Read on to learn more.
What is an Off-Plan Property?
An off-plan property is one that can be bought it before it has been built.
This method of buying is common for property developers. Many of them want to invest in a property before the market changes and own it before there is competition for it.
Buying an off-plan property can also provide more opportunity for input on design.
How to buy an off-plan property
If you are interested in buying an off-plan property, they are several steps which you should follow.
1. Find off-plan properties
The first step is to find the off-plan property that you are interested in, and then reserve it. This may involve contacting property developers directly.
Estate agents will sometimes be able to refer you, too.
2. Secure a mortgage
If you are not a cash buyer, you will often need to speak to a mortgage broker.
Once you have secured a mortgage (or mortgage in principle). you can pay a reservation fee for the off-plan property, which is typically around £1,000.
3. Hire a solicitor
Once this has been done, you should hire a solicitor or conveyancer. They will help you organise all of the legal requirements, including paperwork.
4. Exchange contracts
Thirdly, you will have to exchange contracts and pay a deposit for the off-plan property. This is the moment when the house will start to be built, and you have to wait until that process is completed.
5. Wait for building to be completed
Finally, the developer will give you an indication of when the development will be completed by. Once this date comes around, and the house is fully built, you can move in and enjoy your new house.
Pros of buying an off-plan property
Good condition
First of all, when you purchase an off-plan property, it guarantees that the house will be a new build when you move in.
New build properties have experienced less wear and tear, and will therefore be more modern in design, with usually fewer faults.
Warranty
Some off-plan properties also come with a new build warranty, which gives you significant protection.
Potential to personalise
You may also find that it is possible to personalise your off-plan home by having a say on the internal layout, fixtures and fittings as well as where it sits within the development.
This can make your living experience more enjoyable when the time comes to move in.
Cons of buying an off-plan property
Degree of uncertainty
Some homeowners prefer to clearly visualise what their property looks like, when they purchase it. When the house is in front of you (already built) you have total clarity about what you are getting for your money.
On the other hand, when you purchase an off-plan property, you can never be completely sure about exactly how it will look, and this introduces an element of risk to the purchase.
Potential mortgage issues
Secondly, the vast majority of mortgage offers from lenders last for up to six months.
This means that if the construction process is delayed, you may have to re-apply for your mortgage – an inconvenient and time-consuming process.
A lot of mortgage lenders don’t offer mortgages on off-plan properties. This can limit the number of offers you have to consider, as well as how good an offer you are able to get.
Valuation fluctuations
Finally, the value of your property can vary from the moment you secured your mortgage, to it finally being built. If it changes significantly, it could affect your mortgage offer.
Sell your property with WeBuyAnyHome
WeBuyAnyHome are chain-free cash house buyers who can purchase your property up-front and quickly, without hassle or stress. You are in the perfect place to sell your house fast.
Using our own funds, we will purchase your property at a set price, by a date of your choosing, fully managed from beginning to end.
Click on this link for a complete guide to the UK government’s home buying schemes.
Fill in our enquiry form below if you are interested in getting a cash offer for your house.
